A new app has been released on Cydia calle nibbleSMS. This app allows you to send SMS your iPod Touch in a GUI that is much like that of the iPhone.
The app itself is free however you need to buy credits to actually send SMS. Also you can only send, not receive but this is still cheap and easy to use. It is the BiteSMS equivilant for iPod Touch.
You can get if off the BigBoss source for Cydia (CLICK ME)
To see the creators website: CLICK ME